Construction spending is generally tied to macroeconomics so asthe economy is in fuller recovery, I would expect constructionspending to be up too. Indeed, according to the mostrecent data from the Department of Commerce, the valueof construction put in place in June is up 5.5% over the same monthin 2013. However, month over month totals have been fairlyflat since January. Review of the Architectural BillingsIndex, produced by the American Institute of Architects (AIA)Economics & Market Research Group, indicates likelycontinuation of this trend in the short term, with seasonaladjustments in winter and spring.

In recent years, the Architectural Billings Index has been areasonably accurate indicator of construction spending, typicallyleading the market by 11 - 12 months. Beginning in November,2013, the index fell below 50, indicating a material decline inbillings, and probability for a corresponding decline inconstruction spending in the winter of 2014. Since May, theindex has returned to positive territory, with the most significantimprovements in multifamily, commercial and industrial billingsand relatively flat billings for institutional properties.

Things are Warming Up